VE Commercial Vehicles (VECV) today said it will double production capacity of its Eicher branded products in the next three years and will look to foray into the South East Asian markets to expand its export volumes.

The company, which is a 50:50 joint venture between Eicher Motors and Swedish auto giant Volvo, is at present undertaking a Rs 500 crore expansion programme.

"Currently, we have a capacity to produce 4,000 units of Eicher vehicles a month but it is going to fall short very soon. So we are enhancing the capacity to 7,000-8,000 units a month in the next three years," VE Commercial Vehicles Chief Executive Officer and Managing Director Siddhartha Lal told reporters here.

The company would expand the capacity at its existing Pithampur (Madhya Pradesh) plant considering the expected increase in demand, he said.

"After the downturn (in the 2008-09), we expect the auto industry to be in relatively good position in the next 12-13 quarters," Lal said, adding, in the first two months of 2010, the firm sold abouts 6,000 units of 'Eicher' trucks and buses as against 1,500 units in the year-ago period.

To push its sales further, the commercial vehicle maker today formally tied-up with the asset finance company Magma Fincorp to provide retail financing facility for the Eicher range of products from the company.

Commenting on export plans, he said new markets in Africa and South East Asia are being explored. "We have not gone to the east of India except Bangladesh. We are looking towards SE Asia and expand more in Africa, where markets are similar to India," Lal said.

At present, VECV is undertaking a Rs 500 crore expansion programme, which includes product development, enhancing after-sales network and research and development, besides augmenting production capacity.

Lal said the company's tie up with Magma will help sell its products more towards individual buyers.

"As of now most of our sales have been to established operators and institutions, but with Magma's strength in financing individual buyers, we expect increased sales, specially in heavy duty vehicles," he said.

Magma Fincorp Vice-Chairman and Managing Director Sanjay Chamria said: "Today we are funding less than 100 units (per month) of Eicher vehicles. With this tie up we want to push 300 units a month in the days ahead."

He said depending on customer profile, Magma will finance between 75-90 per cent of the on-road vehicle price at interest rates ranging between 9.5 per cent and 13.5 per cent to prospective Eicher buyers through its 153 branches across the country.